Pension Report

Rob Acker / Ed Szymaniak
Pension Report

Pension Rep 

Rob Acker is the Pension Rep for GM St. Catharines. Rob can assist members sign up for retirement; provide an estimate for your GM pension benefits, assist surviving spouses with all survivor documents.  Rob also provides information about Canadian Pension Benefits and Old Age Security.

E Mail Rob Acker

Union Hall Office: 905-682-2611 ext 237
In Plant 905-641-6443
Cell

Hours

Monday to Friday  6:30 am – 12:00 pm  In plant GM benefits office

Monday to Friday 12:30 pm – 2:30 pm  Union Hall

Update For GM Members Interested in Taking the Commuted Value of their Pension

There are three options for members if they select to take the commuted value of their pension.

  1. Transfer the lump sum amount – up to the Maximum Transfer Value – to an individual Locked-in Retirement Account (LIRA). Benefits above the Maximum Transfer Value will be paid in cash, less withholding taxes.
  2. Transfer the lump sum amount to a new employer’s Registered Pension Plan (RPP), if that plan permits such a transfer. Benefits above the Maximum Transfer Value will be paid in cash, less withholding taxes. If the new employer’s plan is a Defined Benefit (DB) plan, the Maximum Transfer Value does not apply.
  3. UPDATED OPTION Transfer the lump sum to an insurance company for the purpose of purchasing a Life Annuity. Maximum Transfer Value (MTV) does not apply. The cost of the purchase of the Life Annuity must be less than or equal to the total lump sum. Funds above the cost of the purchase of the life annuity (if applicable) will be paid in cash less withholding taxes.The member would have to also submit a copy of the life annuity quote, reflecting an equivalent benefit to the monthly annuity you would have received.

The member would have to also submit a copy of the life annuity quote, reflecting an equivalent benefit to the monthly annuity you would have received.

It is important to note that the quote from the insurance company “must pay exactly what the GM pension plan would have paid monthly”. The quote must provide a cost and benefit explanation. The Annuity payment must match what the member is eligible to receive under the GM pension plan. Which may include; the basic amount, as well as any supplement or special allowance, and also have the survivor benefit if there is a spouse.

For example, if your commuted value is $600,000, and the insurance company’s annuity is quoted at 590,000, then at retirement the GM Benefit Centre would transfer $590,000 to the insurance company, and pay the remaining $10,000 less taxes to the member.

Before selecting this option members should read the following article Commuted Value Option at GM

Health Care Trust (GM Retiree)

At the retirees meeting this week Gord Graham and Joanne Hannah from the healthcare trust made a presentation for the retirees on the stability of the health care trust, which administers the health benefits for GM hourly retirees. The good news is that all monies committed by General Motors with interest has now been paid to the fund. The asr TRUST assets under administration is 1.9 billion dollars, which is invested in a diversified portfolio. With a portfolio of this size the fund has been able to keep the admin fees exceptionally low with 98.5% of the annual expenditure going directly to healthcare costs. The plan covers 30,000 current retirees and 24,000 dependants. The average age of plan members is 70, and the average claim per member, per year is $3,354. The Plan has sufficient funding and is projected to run through 2070. Executive Director Gord Graham and the board of trustees are doing an excellent job for our retirees securing the future of the Health Care Trust Fund.

Planning For Your Future

Free Unifor Retirement Planning Course, Any member who is considering retirement should attend the next Planning For Your Future Course. This is a great one-day course that both you and your spouse can attend, a free lunch is provided for both of you. We bring in a variety of speakers to explain your company and government benefits, CPP, OAS GM pensions, Estate planning and more. A very worthwhile and informative way to spend your day.

This new one-day course, helps workers and their families plan for the transition from worker to retiree and emphasizes the importance of advanced planning. The course will cover five main topics; Social and leisure time, what to do with your time. Legal presentation, wills and estate planning. Pensions and benefits, Service Canada presentation about the CPP and OAS. Financial Planning, by FirstOntario Credit Union. Retirees Chapter Activites, overview from the retiree chapter. Download and Print Poster  To register for the next course please contact Peter Scott @ 905-682-2611 ext 238 or E Mail Peter Scott

Survivors Information

In the event that a GM retiree should pass away, their death must be reported to the General Motors Employment Rep. Presently, the person you wish to speak with is, Shirley Ancker. Shirley can be reached by telephone at the Glendale Ave. location at 905-641-6345. She will inform the GM Benefit centre, who will prepare and mail out the survivors documents to the surviving spouse.

The benefit centre will contact Sun Life, who will send out an insurance notification and claim statement form to the listed beneficiary (s).

When the survivor receives the Sun Life correspondence in the mail, and if they require assistance to complete the forms, she or he may bring that, along with all correspondence from the GM Benefit Centre along with, Two copies of the death certificate, a void cheque, and their S.I.N. card to the Union hall any weekday afternoon, between 12:30 and 2:30 and the Unifor Pension Rep. who help complete the paperwork, and answer any questions that you may wish to ask.

If a retirees spouse pre-deceases them, the death still needs to be reported to the GM employment rep. A spousal revocation form and insurance beneficiary designation form needs to be ordered, and then completed, so that survivor’s premiums are no longer deducted from your pension.

Your Pension Rep. will assist with these documents.

If a widowed retiree wishes to remarry or co- habitat with a new spouse it is very important to note, that you only have a one year window of opportunity to take out the survivors option again and add that spouse as a survivor on your pension. This means that you have one year to make application to add this spouse, and start paying the survivors premium so that your survivor receives a survivor’s benefit after you are gone. If you exceed one year after marriage or co-habitation before making application under the terms of our collective agreement, the company will not accept it.

Canada CPP

As of January 1st 2012 employees 60 years of age or older may apply for and receive Canada Pension Plan benefit while still working. If an active employee chooses to apply at age 60, they will still have to make contributions through payroll deduction to the annual maximum. If you have any questions regarding application for Canada Pension Benefits, please see your pension rep or go to the CPP website www.servicecanada.gc.ca and follow the links.


GM Pension Update – Commuted Value

22 February, 2013

We have just received word that General Motors has received approval from the Financial Services Commision Of Ontario (FSCO) to offer a Commuted Value Option on the General Motors Hourly Rated Pension Plan. GM says that there will be a C.V. estimate modeller up and running on the GM Canada Benefit Center Website www.gmclbenefits.com (Hewitt) on 6 March, 2013. Retirement Eligible employees will be able to receive an estimate , and the estimate will be accurate for a 6 month period.

In the future, when a retiring employee receives their Pension Election Authorization Forms ( retirement papers) there will be a field for the monthly Basic Pension and Supplementary/ Special Allowance amounts and also a field with the Commuted Value and Maximum Transfer Value that has been calculated for the specific retirement. The retiree may then choose which option they would prefer, provide their signature and return the papers to Hewitt.

We understand that those retiring with the Commuted Value will still have Health Care benefit coverage under the ASR Trust,CAW legal benefits, and Basic life insurance from General Motors

Remember…“Retire Wise – Be Well Advised, Talk to your Pension Rep”


GM Pension Update – Commuted Value

GM Commuted Pension Update (December 2012) – Since the ratification of the last contract, members have been asking questions about taking the commuted benefit of their pension. To try and answer all of your questions, Jo-Ann Hannah from the CAW Pensions and Benefits Department has sent all the pension reps, the following Q & A sheet, which I would like to share with you.

Commuted Value Option at GM Q & A

Remember…“Retire Wise – Be Well Advised, Talk to your Pension Rep”


GM Pension Update – 2012 Bargaining

During 2012 bargaining between the CAW – Ford Master Bargaining Committee and the Ford Motor Company, it was agreed that as of 1st of January , 2013 future retirees may choose to receive a commuted value ( lump sum ) of their pension upon retirement in lieu of a monthly defined benefit pension. This agreement was passed over to the CAW – GM Master Bargaining Committee as a part of the pattern that was set by the Ford Negotiations. It is a part of our recently ratified collective agreement, and in the future, retirees will have a choice.

This has piqued the interest of many of our members, and we are sure that those of you who use a financial planner may have already been contacted by your adviser. At this time there are no details other than the fact that GM will have to apply for, and be given approval from the Financial Services Commission of Ontario ( FSCO ) to offer lump sums instead of monthly pensions to those retirees who may wish to do so.

GM applied for, and was given permission to offer Commuted Value in lieu of monthly pension to their salaried employees, and those employees may receive an estimate of their commuted value no sooner than six months prior to their chosen retirement date.

Commuted Values are based on many factors and are different for each person. Some of the factors considered in these calculations are: Age, sex, marital status, year’s service, present interest rates, etc.

The CAW does not endorse taking lump sum over monthly defined benefit pensions, although for certain members it may be a consideration. An example may be, an employee with an illness, who is single and wishes to retire.

Never the less, it may be advised, especially to those of you who are interested, that you speak with your financial adviser and ask them to provide you with a lump sum figure that would provide you with a monthly annuity equal to your 30-n-out amount until age 65, and your basic pension amount beyond that. And let’s not forget about entitlement for our surviving spouses after we’re gone. This should be interesting.

30-n-out for production is $3,515 month gross till 65, basic pension after 65 is $68.50 x years service/month, gross

30-n-out for skilled trades is $3,895 month gross till 65, basic pension after 65 is $81.00 x years service/month, gross

Survivors pension is monthly basic pension (years service x pension rate) minus 5% (survivors premium) x .66667

“Retire Wise – Be Well Advised, Talk to your Pension Rep”


Update To GM Members – Pension Plan Funding Letter

August 1, 2012

GM must put out an annual update on the funded status of the pension plan because they have special funding relief under the Ontario regulations. Ford and Chrysler also took advantage of Ontario funding relief measures, and they also mail out an update each year on the funded status of their pension plan to the plan members, which is you, the membership. In Ontario, 30% of defined benefit pension plans used the solvency funding relief measures.

The transfer ratio keeps going down. Is this a cause for concern?

Actually, the transfer ratio has gone up significantly since 2009. In 2009, before the Ontario government put the $3.28 billion into the GM pension plan, the transfer ratio was 45.3%. Had the plan been wound up and GM was unable to make any payments to the pension plan, retirees and active members would have only received 45.3% of the value of their pension entitlement.

In 2010, the transfer ratio went up to 65.6%. In 2011, it is down slightly to 62.8%. The year 2011 was a bad year for pension plans – investment returns were poor and the interest rates for calculating the liabilities were down to 2008-2009 rates (a particularly low period for interest rates during the economic crisis). Low interest rates mean an increase in liabilities. The Ontario pension regulator reports that 88% of pension plans in Ontario are in a shortfall situation.

Most plans have seen a drop in the transfer ratio for 2011. The GM pension plan did not do so badly given the difficulties of 2011 for pension plans. Even a slight increase in interest rates will improve the transfer ratio. Of course, we would like to see a better transfer ratio than 62.8%. On a going concern basis, the pension plan is 85.1% funded (up slightly from 2010 when the going concern funded ratio was 83.9%). As long as the GM plan continues in operation, it is fairly well funded. This is why it is extremely important to maintain the GM operations and the pension plan into the future.

What does this phrase in the letter mean: “If the plan were wound up and assets remained after payment of all liabilities, the legislative grow-in benefits would be paid from those remaining assets.”?

If the plan were to wind up, GM would be required to bring the pension plan to 100% funding within 5 years of the wind up. Only if GM were bankrupt could they fail to make up the shortfall in the pension plan and even then the union would go after the US corporate office to make up any shortfall in the pension plan.

As the letter states, GM is not required to fund the legislative grow in (members with age and service equal to 55) but if there were sufficient funds in a wind up, GM would pay the legislative grow in benefits. The “grow in” benefits are explained below. Since the GM plan has its own grow in provisions for a downsizing, the legislative grow in benefits are less important.

Why isn’t GM covered under the Pensions Benefits Guarantee Fund?

The Pension Benefits Guarantee Fund is funded through the Ontario government. It guarantees up to $1,000 of the pension benefit. The PBGF does not cover GM pension plan members until the plan reaches 100% funding. This was a condition of the Ontario Government investment of the $3.28 Billion into the GM Pension fund.

What about the wind up ratio going down?

The wind up ratio is a slightly different calculation than the transfer ratio. The wind up ratio sets the amount for GM’s contributions to the pension plan.

What is the legislative grow-in and why is it not covered?

The legislative grow in requires that all pension plan members who are:

1) Involuntarily terminated (ie: if the plan were to wind up and all employees are terminated or in a downsizing employees are terminated) and
2) Have age and service equal to 55 (e.g., age 50 and 5 years or more years of service)

are entitled to the earliest unreduced pension allowed under the terms of the pension plan. So someone age 50 with 28 years of service would be entitled to the pension payable within 2 years (30 years of service).

GM is exempt from funding the legislative grow in. However, since the GM collective agreement and pension plan have enough provisions to bridge members to their unreduced early retirement date, the 55 point grow in is not that important. GM expects the “doc 12” to take care of any members who might not have employment in the spring 2013 downsizing. (Oshawa consolidated line)


Intra Council Reports

This month I attended the GM INTRA Corporation Council IN Toronto and provided the following report from St Catharines. If you would like to read the full pension report from all locations click on the following link. GM Pension Committee Report

Present population in St. Catharines: (as of June 1, 2012)

Producton – 1,033
Skilled Trades – 442
Permanent Layoff – 189

Total Population – 1,664

Retirements

Local 199 will be running a “Pre-retirement Planning for your Future” seminar at the Local 199 Union Hall on Wednesday, June 27, 2012. Further dates to be announced.

So far in 2012, 44 Skilled Trades members have received retirement dates under the Special Enhanced Incentive Retirement Program. Two production employees have retired with a 30 & Out pension. One from production and the other one who had timed out on benefits.

Hewitt

General Motors has initiated an online retirement process through Aon Hewitt. Further attempts to reduce their legacy costs results in more self-sufficiency required by their employees. Please make sure that your members have an active password and user I.D. This will allow them to enter their accounts, review the information that the company has given Hewitt and make any corrections, if necessary. Employees may also choose various dates and predict retirement income. Single employees should be reminded to choose the, “I do not have a spouse” tab, as opposed to the “I reject the survivors option.” Should you choose the latter, you will not be eligible to enroll in a joint and survivors type pension if you become attached, post retirement.


GM Pension update

Recently, General Motors and the GM Canada benefit centre (Hewitt) initiated an online retirement process. If you are considering retirement we would recommend that the first step should always be to contact the CAW pension rep well in advance and before you make any decisions. The pension rep can explain the process and the steps you need to follow between now and your retirement. Your pension rep’s have the training and experience to guide you through the process.

All active members and retirees should be setup with a password and user i.d. with the GM Canada benefit centre; this will be required to start the retirement process. The phone number is 1-877-442-4625.

You will still have to submit birth certificates for you and your spouse, or citizenship papers, and your marriage certificate. (an affidavit of co habitation would be required for common law relationships)

If you are single at the time of retirement, we would recommend that you check off the “I do not have a spouse tab”. This will allow you to add a spouse post retirement, should you become attached. If you check the, I reject the survivors benefit tab, you will disqualify yourself from selecting the joint and survivor option in the future.

After the company has initiated your request to retire, you will need to provide direct deposit information, which can be a cancelled cheque. This will allow you to designate a financial institution that will receive your monthly pension payment.

Next, Hewitt will prepare a calculation statement and final papers for you to sign and send them to you by Canada post.

When you receive these documents from Hewitt, we highly recommend that you contact your CAW pension rep. Together we will review the figures on the calculation statement to make sure that they are correct. Secondly we can discuss the terms and conditions covered in the retirement papers. When you retire you will fully understand the obligations of both you and the company regarding pension, insurances, and survivors benefits.

Rob Acker or his Alternate Ed Szymaniak, will be happy to assist you with the retirement process when you choose to do so. 905-682-2611 ext 238 or 905-641-6443


Current Pension Rates

The current basic retirement rates for production is $68 – $68.50 / per month x years service. The skilled trades rate is $81 / per month x years service.

The monthly pension rates as of October 1, 2010 for an employee with 30 yrs or more of service are $3,515 for a production employee and $3,895 for a skilled trades employee. This amount changes at age 65 to a basic benefit when the supplement or special allowance falls off. A production employee with 30 years service would take home approximately $650 week, from GM until the age of 65. A skilled trades employee with 30 years service would take home approximately $700 per week, from GM until the age of 65. There are a few variables which could change these figures such as; spouses age compared to employee’s age, tax implications if drawing from investments and extra service over 30 years which would increase the survivor option cost.

AGE 65 & BEYOND

At age 65, all GM retirees pension money is reduced to a basic benefit rate dependant on years of service and classification at time of retirement.

For new retirees, as of October 1, 2007 this monthly rate will be $68 per year of service for an assembler and $81 per year of service for a tradesperson. This amount is indexed each year.

Any government money such as Canada Pension plans and Old Age Security is not included in any calculations in this article.


GM Retiree Health Care Trust

February 2012

Wednesday 15th February, Gordon Graham, executive director for the asr Trust (Auto Sector Retiree’s Health Care Trust) visited CAW Local 199 to explain health care benefit changes and address members questions. Aproximatly 500 retirees and active members attended this meeting at the Union Hall. Link to Image Gallery

Message From Ken Lewenza
GM Retiree Benefit Changes
Link to asrTRUST Website


Canada CPP & OAS

As of January 1st 2012 employees 60 years of age or older may apply for and receive Canada Pension Plan benefit while still working. If an active employee chooses to apply at age 60, they will still have to make contributions through payroll deduction to the annual maximum. If you have any questions regarding application for Canada Pension Benefits, please see your pension rep or go to the CPP website www.servicecanada.gc.ca and follow the links.


GM Intra Corporation Council – Pension Report

December 2nd 2010

Last week I attended the GM Intra Council in Toronto. I have attached a copy of the CAW Pension Report made for the Council. I thought you would appreciate an update of the status for each location. Please note, since the report was made 20 workers have retired from GM St Catharines.To read the report click on the following link.

GM Intra Corporation Council – Pension Report


Public better than private on pensions

December 2nd 2010

The notion that we can’t afford strong public programs – that we’re better off buying services or benefits on our own – is one of the central falsehoods blocking meaningful progress toward improving Canadian well-being. An excellent example is the looming battle over public pensions, an issue that will be the focus of a meeting of Canada’s finance ministers in December.Read More


GM slates $6 billion pension contribution

November 2nd 2010

General Motors Co., Detroit, will contribute at least $4 billion in cash and $2 billion in GM common stock to the company’s $85.9 billion U.S. hourly and salaried pension plans, the company announced Thursday. Read More



Canadian Pension Security System

April 15th 2010

On March 24th, The Minister of Finance, Jim Flaherty announced there would be coast to coast consultations on Canada’s retirement security system.

Mr. Flaherty said, “Canadians work hard to realize their retirement dreams” and “Our government will be giving Canadians an unprecedented opportunity to provide direct input on the future security and soundness of Canada’s retirement income system”.

The public town hall meeting locations are scheduled for Charlottetown, Prince Edward Island, Quebec City, Quebec and Richmond, British Columbia (dates have not been announced) and nothing in Ontario!.

While our union supports the consultation process the limited locations announced will deny many Canadians the opportunity to participate in the debate and have their voices heard. If Minister Flaherty truly believes in giving Canadians the opportunity to provide input he must expand the town hall locations and lengthen the time frame for this process.

This issue is too important to be limited to only three locations in Canada and be concluded in one month.

I am asking all CAW members to call Minister Flaherty’s office in Ottawa at 613-992-6344 and in his riding at 905-665-8182 and demand that more locations including Niagara be added to the consultation process.

You can also email him at; flaherty.j@parl.gc.ca or jim@jimflahertymp.ca


CPP in the News

The national president of the CAW has endorsed and supports a Canadian Labour Congress proposal that may effectively double Canadian workers CPP benefits in retirement.Of course, larger contributions from employment earnings would be required, but this could be a big positive for Canadians who are concerned about the adequacy of their future retirement earnings. CAW president Ken Lewenza supports a gradual increase in employee contributions over seven years that would see an increased retirement benefit to contributors. Dave Demarco


The Push for Pension Reform

April 13th 2010

Canadians shouldn’t let “pension envy” enter in the debate over pension reform, the head of the Ontario Teachers’ Pension Plan said Tuesday. This is a danger as the private sector increasing moves towards defined contribution pension plans and away from defined benefit plans, Jim Leech said during a keynote address. Canadians are being told that defined benefit plans are unaffordable, but that is largely because of ‘short-sighted tax rules and court decisions that have effectively prevented sponsors from saving enough in good times to offset losses in bad times,” Leech said Read More


Alberta nixes bigger Canada Pension Plan, wants private sector to lead

April 12th 2010

In a blunt warning that signals a major shift in federal-provincial negotiations on how to reform the country’s pension system, Ted Morton said Alberta would rather see an”incremental” approach. Rather than bulk up the CPP in a way that might not even help those with precarious finances, Morton said he’d rather see governments make a few regulatory changes to give financial institutions more leeway to encourage people to save. Financial institutions should be given about 10 years to show what they can do, before governments step in with a heavy-handed approach, he said. Read More


Lewenza calls for doubling of CPP

April 11th 2010

The head of the Canadian Auto Workers union is the latest figure to call for an overhaul of the Canada Pension Plan.Union president Ken Lewenza told CAW council members in Port Elgin, Ont., Friday that he supports a proposal to double benefits from the government-run pension plan.The issue of pension reform has gathered steam in recent months with the high-profile collapses of numerous private pension plans. In December, Finance Minister Jim Flaherty met with his provincial counterparts in Whitehorse to discuss ways of overhauling the system.At the meeting, some provinces were in favour of creating a second, complementary system to supplement the CPP, while others argued simply putting more money into the existing system is the wisest course. Ultimately, no consensus was reached but on Friday, Lewenza came out in favour of a proposal to double benefits from the government-run pension plan. Speaking at a meeting of the union’s parliamentary body, Lewenza lobbied to gradually increase workers’ contributions to the CPP by approximately 58 per cent over seven years. Read More



Special Enhanced Incentive – Retirement Preparation

When a retirement event is declared, the first step is for management to canvass the workforce to see who wishes to retire. If you are fairly certain you would like to retire this year then sign the form saying you would like to participate. It is easier to back out if done in a timely fashion than it is to try and get added to a list at a later date.

After the lists are compiled and manpower requirements are sorted out then a Retirement Initiation Form must be signed. Along with this form, you will need to provide certain documents such as a marriage license (if married), spouse’s S.I.N. and both partners’ birth certificates. If these documents are not available, there are other documents which may suffice. When this information is compiled, the official pension papers can be requested from Toronto. If a person is approved to retire, they will also need to complete a TD2 form directing any lump sum monies to a financial institution, if desired, and a direct deposit form for their monthly pension deposit. These forms are usually sent out from our local personnel office. After this process, the pension papers must be signed by the employee, the GM pension representative and the union pension representative.

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